THE SOUTH African government has placed a six-month moratorium on receiving new mineral prospecting licence applications so it can amend the current legislation governing the sector, which many in the industry believe is flawed and open to abuse.
Mineral resources minister Susan Shabangu told a press conference last Tuesday that from September 1st next her department would conduct an audit of all prospecting licences granted since the Mineral and Petroleum Resources Development Act was adopted in 2004.
“We have this moratorium for six months to clean out our systems and ensure deficiencies are sorted out,” she said.
However, it has emerged that approved licences will not be revisited unless they are successfully challenged through the courts.
The minister, who has acknowledged recent media reports on the granting of a number of prospecting rights, has cast the department of minerals and energy in a poor light, also promised a greater degree of transparency from the beginning of next month.
Part of her efforts to ensure the process of assessing licence applications is kept above board includes publishing the latest information on the status of exploration and mining licences on the department’s website.
“This is in the interest of transparency and means that all stakeholders, including members of the public, will have access to our new electronic administrative system,” she said.
Ms Shabangu vows to tackle the issues of corruption and incompetence currently sullying her department’s reputation locally and internationally.
A significant change to the application process she has introduced is that licences will no longer be granted at regional offices. Instead, all decisions will be made at the department’s head office in Pretoria.
The commitment to overhaul the act was also welcomed by many industry players who say it is full of ambiguities. But some legal experts have questioned whether the legislation allows for the minister to suspend the process of issuing licences.
Some of the urgent amendments to be introduced, according to the minister, include provisions dealing with the transfer of mining and prospecting rights, and what to do with rights that have lapsed.
Local media recently highlighted areas of concern within the Act when reporting on the award of prospecting rights to Imperial Crown Trading 289, a local shelf company.
According to Business Daynewspaper, a number of politically linked individuals are shareholders in Imperial. The company recently received an €85 million takeover bid from mining giants ArcelorMittal if it could convert its prospecting right into a mining right.
